Over the coming few months, I plan to read three specific books on investing. Below is why, what I hope to accomplish, and an invitation to join me.
Over the last 3-4 years I have been tracking the performance of two retirement accounts Cathy and I inherited as part of her father’s estate. These investments are professionally “managed”. However, as I have tracked them, I have noted that the investments regularly under-perform vs. the DOW (and SP500), which are “unmanaged.” This has always puzzled me as it seems managed investments should do better than unmanaged ones.
Recently, I have started reading on investing and read that the DOW/SP500 beats over 85% of professionally managed funds over the long term. While it may be normal, it does not seem to be in line with good stewardship. So, I would like to do something different.
I am starting to read from a variety of authors to determine my strategy moving forward. I would like to invite others interested to read and discuss these books. I do not see the book “club” as a detailed study but more of an overview. I will assign a book to read, give people a month to read it, and then meet a time or two to discuss each book. We would then go on to the next book the same way. I would like to get through a few of the books before summer.
Here is my list of books I plan to read:
- The Random Walk Guide To Investing by Burton G Malkiel. The book is a good overview of investing. In the end,he argues for the “wisdom of the market” and recommends getting into a fund that reflects the market as a whole and sticking with it to reduce transaction costs that occurs with managed fund’s regular adjusting of the portfolio seeking higher returns.
- Investing in One Lesson by Mark Skousen.
Again, he has some good general information on investing. In the end, he argues for specific classes of investments, esp. well-valued stocks that pay regular dividends, which he says do very well over the long haul.
- The Sound Mind Investing Handbook – A Step-By-Step Guide To Managing Your Money From A Biblical Perspective 5th Ed. by Austin Pryor. This is the longest work, written from a Christian perspective. I am saving this for last. Likely we will do it over a couple of month due to its length.
I have also been looking at recommendations of David Ramsey in The Total Money Makeover. I do not plan to read it together but may relate his conclusions at the end of our study.
While the focus will be on stocks, we will also look some at bonds and other investment options.